Bruce Tuchman: Next Stop – OTT

As I head to NATPE again this year, I do so with a very different outlook. For over 20 years I have been a senior executive in the global TV industry, attending this conference regularly, but about three years ago, a number of seismic changes shook our industry and those who didn’t take notice are starting to feel it.

It was 2015 and, like some others, I was watching some bold industry moves: Major media networks launched direct-to-consumer services like HBO Now, and mobile providers touted plans for un-metered SVOD streaming. Even more earth-shaking were the announcements by Netflix and Amazon of their ambitious international expansion plans and multi-billion-dollar original content budgets.

Meanwhile, some other companies, sensing “trouble in paradise,” launched virtual MPVDs as a cheaper OTT alternative for consumers to keep them glued to the multichannel package mindset. I realized the business was at a critical juncture and I needed to make the decision to let my growing curiosity lead me around the next corner.

When I started investing in and advising emerging digital media companies in the spring of 2016, it was 100 per cent clear to me that all the assumptions we had about linear television were coming to an end. Huge shifts in consumer viewing behavior were leading the disruption, but the traditional media industry was still grasping the last threads of a once unassailable business model. It may be impolitic to say, but I really don’t think there’s a bright future for an executive who doesn’t appreciate the gravity of what is happening. But you can’t just come to this realization and suddenly transform yourself into a digital expert. It takes a tremendous time investment, a lot of trial and error, and some humility. It’s complex and fascinating and it’s the future.

So, my journey since 2016 has not just been about my restructuring my take on the media business, but reconstituting and rejuvenating my own skill set. Absorbing new distribution and advertising models for OTT, while working to develop new niche SVOD services from the ground up, it has become categorically certain to me that algorithmic use of data will soon wholly drive the industry’s income streams. There is a universe of viewership that Nielsen isn’t capturing, but others are, and adoption of audience measurement systems built on the back of big data and AI are now starting a revolution that will ultimately end in new industry standards.

I’ve also come to have a greater appreciation for the fact that there’s more to OTT than Netflix. New models of OTT are challenging premium OTT services like never before. All over the world competitors to Netflix are emerging, as are niche-focused SVOD services like WWE Network. So too are Virtual MVPDs, TV app aggregators like Roku; and broadcaster and film studio stand-alone platforms like CBS All Access – and in the not-too-distant future some potential game changers being hatched out of the Disney/Fox combination.

In 2018, there’s no doubt that the erosion of the pay-TV bundle will escalate, especially as sales of Smart TVs continue to rise and new-home buyers and renters elect to forego connecting that dreaded cord. And we’ll see the OTT competition heat up: More SVOD services will launch (many will fail, some will gain traction), vMPVDs will grow and add features, content and continue to flank their non-virtual counterparts with a more manageable selection of channels that people actually value. Indeed, the rapidly global scaling of OTT to hundreds of millions of subscribers will enable even more high-quality content creation, and superior data collection, and efficiencies in commoditized platform technologies will provide less and less barriers to market and better consumer experiences. And what about the old-school media executive? Well, those of us eager to learn and embrace all of these fascinating and sometimes confusing permeations will dive in and gravitate towards the cutting edge of innovation that will usher in evermore customized, intuitive, and engaging entertainment experiences for consumers. And so, the learning, as well as the journey, will continue.

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About Bruce Tuchman

Bruce Tuchman is alobal media entrepreneur, investor and advisor in the global content and technology industries, including OTT, SVOD, data science, mobile, linear music and sports ventures. Board member and investor, Parrot Analytics, Senior Advisor to Catcha Group and Mars Reel, Senior Advisor and President of Sales for Tunity, among other investments and engagements. Chairman, the Americas Fund for the London School of Economics. He served as President at AMC Global and Sundance Channel Global, and prior as President MGM Worldwide Networks.